Is HTLD A Good Stock To Buy Now?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Heartland Express, Inc. (NASDAQ:HTLD).

Is HTLD a good stock to buy now? Heartland Express, Inc. (NASDAQ:HTLD) was in 15 hedge funds’ portfolios at the end of September. The all time high for this statistic is 18. HTLD investors should pay attention to an increase in enthusiasm from smart money of late. There were 13 hedge funds in our database with HTLD holdings at the end of June. Our calculations also showed that HTLD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ian Wace of Marshall Wace

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to check out the new hedge fund action encompassing Heartland Express, Inc. (NASDAQ:HTLD).

Do Hedge Funds Think HTLD Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HTLD over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Heartland Express, Inc. (NASDAQ:HTLD), with a stake worth $18.9 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $7.5 million. Millennium Management, D E Shaw, and Marshall Wace LLP were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Quantinno Capital allocated the biggest weight to Heartland Express, Inc. (NASDAQ:HTLD), around 0.2% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, designating 0.18 percent of its 13F equity portfolio to HTLD.

Consequently, some big names have jumped into Heartland Express, Inc. (NASDAQ:HTLD) headfirst. Tudor Investment Corp, managed by Paul Tudor Jones, established the biggest position in Heartland Express, Inc. (NASDAQ:HTLD). Tudor Investment Corp had $4.1 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also made a $2.6 million investment in the stock during the quarter. The other funds with brand new HTLD positions are Dmitry Balyasny’s Balyasny Asset Management, Hoon Kim’s Quantinno Capital, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).

Let’s now review hedge fund activity in other stocks similar to Heartland Express, Inc. (NASDAQ:HTLD). We will take a look at Fulton Financial Corp (NASDAQ:FULT), NMI Holdings Inc (NASDAQ:NMIH), Simulations Plus, Inc. (NASDAQ:SLP), Azul S.A. (NYSE:AZUL), SkyWest, Inc. (NASDAQ:SKYW), Zealand Pharma A/S (NASDAQ:ZEAL), and Air Transport Services Group Inc. (NASDAQ:ATSG). All of these stocks’ market caps resemble HTLD’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $57 million in HTLD’s case. Air Transport Services Group Inc. (NASDAQ:ATSG) is the most popular stock in this table. On the other hand Zealand Pharma A/S (NASDAQ:ZEAL) is the least popular one with only 3 bullish hedge fund positions. Heartland Express, Inc. (NASDAQ:HTLD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HTLD is 67.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately HTLD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HTLD were disappointed as the stock returned -0.8% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

Disclosure: None. This article was originally published at Insider Monkey.